CAGAYAN de Oro City Mayor Rolando "Klarex" Uy on Wednesday urged the rescinding of the joint venture contract between Cagayan de Oro Bulk Water Inc. (COBI) and the Cagayan de Oro Water District (COWD) as a solution to the ongoing water supply dispute.
The mayor made this statement during the 'People's Day' event on July 24, addressing the unresolved impasse involving the Local Water Utilities Administration (LWUA), COWD, and COBI.
Mayor Uy believes that terminating the contract with COBI will allow COWD to invite new bidders for the bulk water supply, potentially bringing more competitive and fair pricing to the water district.
Uy did not specify whether the contract could be legally rescinded, given the reported P479 million debt COWD owes to COBI.
This debt has accumulated from differential bulk water rate adjustments since 2021 and January 2024, as per the 2017 contract's stipulations of automatic rate increases every three years.
Uy emphasized that the frequent rate hikes implemented by COBI are a primary reason for his call to rescind the contract.
He suggested that once the contract is nullified, Metro Pacific Investment Corp. (Metropac) could participate in a new bidding process.
The COWD has refused to acknowledge COBI's levy, citing its inability to meet these financial obligations due to the economic impact of the Covid-19 pandemic, which prevented them from adjusting water rates.
The court has intervened, ruling that the public's right to access water should not be compromised by contractual conflicts. A Writ of Preliminary Injunction (WPI) has been issued to prevent COBI from cutting off the bulk water supply to COWD.
Mayor Uy stressed the importance of transparency and public scrutiny in the bidding process and the provisions of any new contract.
He believes the current conflict arose because the original COBI-COWD contract lacked public transparency.
Uy criticized the contract as "onerous and unfair" to consumers, allowing COBI to increase water rates every three years without public consultation or LWUA approval.
COBI was established from a joint venture agreement between Metro Pacific Investment Corp. and COWD in 2017, with Metropac holding the majority share.
The conflict between COWD and COBI has escalated into a legal battle, further complicated by LWUA's full intervention in COWD's operations in June 2024.
COWD has rejected LWUA's jurisdiction, denying entry to LWUA's appointed interim general manager and board of directors based on a Department of Justice (DoJ) opinion issued on July 18, 2024.
The DoJ stated that LWUA could take over water district operations if the district defaulted on its loan obligations, which COWD insists it has not.
Mayor Uy mentioned that he had communicated his concerns to LWUA and President Bongbong Marcos, and distanced himself from protests by COWD employees and the Bantay Tubig Movement against LWUA's takeover.
After the people's day event, Uy even disclosed to reporters that a high government official had visited him to relay an invitation from businessman Manny Pangilinan for a meeting in Manila. Uy declined, stating that he preferred to discuss matters if Pangilinan visited the city.
Uy reiterated his stance that the 2017 contract with COBI should be rescinded.
Uy clarified that he does not oppose the involvement of Metro Pacific Water or COBI in the city's bulk water supply, as long as the rights of the citizens to clean, reliable, and affordable water are ensured.
He emphasized the need for transparency in any new contract negotiations.
The 2017 bulk water contract's contents were not publicly disclosed until its ceremonial signing in August 2017, attended by then-city mayor Oscar S. Moreno.
The City Council's 2018 resolution requesting a copy of the contract from COWD was ignored.
When the contract took effect, the water price per cubic meter was P16.60. It increased to P20.57 in 2021 and P24 in January 2024, following the automatic escalation clause.
COBI, owned 95% by Metro Pacific Water, demanded COWD pay the alleged debt by April 30, 2024. When COWD refused, COBI instructed its main supplier, Rio Verde Water Consortium Inc., to cut off the bulk water supply on May 1.
This led Mayor Uy to declare a state of emergency in the city and urged COWD to seek emergency purchases from other suppliers.
COBI eventually cut off the water supply on May 14, 2024, but a court-issued temporary restraining order prevented a prolonged disruption.
As the conflict continues, Mayor Uy remains firm in his stance that rescinding the contract is the best course of action to ensure a fair and transparent resolution for the city's water supply issues.
